Offers from major CIS-based billet exporting mills have hit and exceeded $400/mt FOB this week amid the positive outlook in both the billet and scrap segments. At the same time, for now any prices above $400/mt FOB will hardly be workable, sources said, taking into account that such high bids may come only from traders or from Turkey.
Offers from the majority of producers from the CIS have been at $400-410/mt FOB for October shipment, up by $5-10/mt from the week before. Some sources have reported contracts to traders at $400/mt FOB already. But end-use demand has remained weak and bids have been mostly below sellers’ expectations.
“Turkey is the only moving market nowadays,” a source said. Though there have been no reports about transactions of ex-CIS billet to Turkey, the tradable value has been assessed by sources at $395-400/mt FOB. For now, market players are waiting for further developments in the scrap segment in Turkey and new sales of rebar.
Bids from other destinations, in North Africa in particular, have remained at much lower levels. An offer for ex-CIS material to Libya has been at $420/mt CFR, but there has been no information that a deal has been done.
In Asia, the situation for CIS-based exporters has not changed much, even taking into account the recent increase in futures and iron ore prices. Last week, a contract for billet from Russia’s Far East was rumoured to China at $424/mt CFR and, though it has not been confirmed by the time of publication, most market participants said that this level reflects the overall workable level late last week. “China is paying $425/mt CFR maximum for CIS billet,” one source said. And this level is equivalent to $380-385/mt FOB. Even if prices reach $435/mt CFR, which is sought by a number of suppliers from different countries, it will still not be very attractive for Black Sea suppliers, at least for now.
The SteelOrbis reference price for ex-CIS billet has increased by $2.5/mt today and by $7.5/mt since late last week to $395-400/mt FOB.
